Court reviews Customs Act Section 28(2) on show cause notice after duty payment

The High Court of Madras, in a judgment by Hon'ble Dr. Justice Anita Sumanth, considered an assessment order based on a show cause notice for payment of differential duty and interest before the notice. The court examined the applicability of Section 28(2) of the Customs Act, which prohibits issuing a show cause notice once duty and interest are paid and reported to the proper officer. Consequently, the court granted an interim stay and scheduled further proceedings, emphasizing adherence to procedural requirements to avoid redundant enforcement actions.

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Issues:
1. Impugned assessment order based on show cause notice
2. Payment of differential duty and interest prior to show cause notice
3. Applicability of Section 28(2) of the Customs Act
4. Granting of interim stay

Analysis:
The High Court of Madras, in the judgment delivered by Hon'ble Dr. Justice Anita Sumanth, addressed several key issues. Firstly, the court noted that the impugned assessment order dated 24.12.2018 was founded on a show cause notice issued on 09.05.2017. The notice detailed the payment of differential duty on imported goods and interest by the importer before the issuance of the notice. This pre-payment of dues raised the question of whether Section 28(B) of the Customs Act was applicable, as it pertains to the recovery of duties not levied or paid. The court highlighted that the provision states that once the duty and interest are paid and the proper officer is informed in writing, no show cause notice should be served for the same.

Secondly, the court specifically referenced Section 28(2) of the Customs Act, which mandates that upon notification of duty and interest payment to the proper officer, no show cause notice should be issued regarding the same duties or any penalties under the Act or its rules. In light of this provision, the court concluded that an interim stay order was warranted in the present circumstances.

Lastly, the court directed the matter to be listed for the filing of a counter on 20.03.2019, allowing further legal proceedings to take place. Overall, the judgment focused on the legal implications of pre-payment of duties and interest, emphasizing the procedural requirements outlined in the Customs Act to prevent duplication of enforcement actions.

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